House passes economic development bill, adds sales tax holiday

STATE HOUSE -- The House passed an economic development package late Wednesday, tacking on an August sales tax holiday as part of House Speaker Robert DeLeo's jobs bill.

Just before midnight, the House passed the bill (H 4165) on a 125-to-23 vote. The plan was approved just after top House and Senate Democrats filed an accord to raise the state's minimum wage to a nation-leading $11 n hour.

The package was filed after Gov. Deval Patrick proposed his own bill in April, totaling around $100 million. Senate President Therese Murray said earlier this month the Senate will offer its own economic development package.

DeLeo's bill includes a $15 million middle skills jobs training grant fund, $10 million for brownfields redevelopment, efforts to boost jobs in so-called Gateway Cities and a Big Data Innovation and Workforce Fund, focusing on analytics and data-based industries. Patrick's proposals to curb the use of non-compete agreements and hand municipal governments more power over liquor licenses were not included in the House legislation.

Rep. Joseph Wagner, a Chicopee Democrat and House chair of the Joint Committee on Economic Development, said in floor remarks that the bill, which started out containing $60 million in initiatives before lawmakers added millions of dollars through amendments, would "expand economic opportunity beyond Interstate 495.

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But Rep. Marc Lombardo, a Billerica Republican, urged his fellow lawmakers to reject the bill. State government shouldn't be seeking to fix the economy, he said, adding, "There will be winners and losers, but our job is to get out of the way, to let this system of capitalism thrive."

Amendments were largely crafted and debated behind the scenes, with limited floor debate and adoption and rejection occurring through voice votes. Long stretches of little to no action were punctuated by the rapid-fire approval and disposal of amendments.

The House voted 132 to 13 in support of establishing August 16 and August 17 as a sales tax holiday weekend this year, an idea that will need to be reconciled with the Senate. On a voice vote, the House rejected a Republican move to make the holiday permanent.

The holiday, viewed by retailers as an economic stimulus, has become a tradition since it was first enacted in 2004, occurring every year except 2009, when lawmakers raised the state's sales tax to 6.25 percent during the recession. The state lost an estimated $24.6 million in revenue as a result of the 2013 sales tax holiday.

Republicans also pushed for a meals tax holiday at the end of July with no success: In a 102-37 vote, the House adopted an amendment to study the issue, prompting Republicans to voice their frustrations and note that the House made the same move the last time the issue came up.

Republicans argued that restaurants had been hit hard by the weather, and higher food and health care costs. "Our restaurants are struggling," said Rep. Bradford Hill (R-Ipswich).

Democrats said that while the idea of a meals tax holiday has been floated, its impacts remain unclear. ""We know the impacts of a sales tax holiday, so we can be informed when we make a decision on that," Rep. Stephen Kulik (D-Worthington) said.

House lawmakers also voted 43-99 to reject a Republican amendment exempting newly incorporated businesses from the annual $456 minimum corporate excise tax for the first three years of their operation. In arguing for the amendment's rejection, Rep. Jay Kaufman (D-Lexington), the House chair of the Joint Revenue Committee, said the idea should be looked at as part of a larger revenue package.

Earlier in the day, House lawmakers preserved the economic development bill's live theater tax credit and rejected proposals to remove the Legislature's powers to approve liquor licenses and cap annual salaries of nonprofit executives benefiting from the bill at $135,000.

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